PROFITS at Middleton furniture-foam giant British Vita have bucked the general malaise blighting manufacturers.

Pre-tax profits for the year ending December 31 were higher than market forecasts, at é73.1m, compared with é68.6m last year.

While sales dipped two per cent to é894m from é910m, and the company has faced sharp rises in the cost of the raw materials used in its plastic and foam products, chief executive David Campbell said demand remained stable, and the company returned an excellent performance despite global difficulties.

"It has been a pretty tough year in the market, and that is likely to continue, but we are in good shape to face the future, and I don't see a lot of similar optimism around elsewhere at the moment," he said.

Mr Campbell said tough cost-cutting measures, including more than 700 job losses, forced on the foam, rubber and plastics company in 2001/2 had streamlined the business.

Well-placed for future

Vita still employs more than 8,500 staff, 2,000 of them in the north west, and Mr Campbell says the company is now well placed to face the future.

During 2002 the company was also able to go ahead with a partial sell-off of its 46 per cent stake in its US associate company Spartech, which was originally halted by the global economic downturn following the terror attacks of September 11.

In May its sale of just over half its holding in the American thermoplastics sheeting company yielded a profit of é109.5m, enabling é39.5m to be returned to shareholders through a share buy-back scheme.

British Vita says it intends to dispose of the remaining 18 per cent when markets settle down.

"We are in good shape financially, with plenty of money," said Mr Campbell.

The board recommends a final dividend of 5.75p, making a total for the year of 11.25p, up from 10.75p last year.